Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.
Friday, November 18, 2016
It looks like the Form 1098-T – now required
to claim an education tax benefit – will remain as useful as tits on a bull for
The week-day daily "Checkpoint Newsstand
November 18, 2016" brought this bad news on my 63-rd birthday (highlights are mine) -
penalty for 2017 Forms 1098-T. IRS will extend the relief from penalties under
Code Sec. 6721 and Code Sec. 6722, as described in Ann. 2016-17, to 2017 Forms
1098-T. Eligible educational
institutions, therefore, will continue to have the option of reporting either
the amount of payments of qualified tuition and related expenses received in
Box 1 of Form 1098-T or the amount of qualified tuition and related expenses
billed in Box 2 of Form 1098-T for the 2017 calendar year without being subject
relief is limited to 2017 Forms 1098-T
required to be filed by eligible educational institutions by Feb. 28, 2018
(or Apr. 2, 2018, if filed electronically) and furnished to recipients by Jan.
The IRS had previously rendered most 2016
Form 1098-Ts totally worthless –
relief. Following the enactment of the PATH Act, numerous eligible educational
institutions informed IRS that implementation of the law change will require
computer software reprogramming and other changes that cannot be implemented in
time to meet the applicable filing and furnishing due dates for Form 1098-T for
calendar year 2016. Accordingly, in Ann. 2016-17, IRS provided that these
penalties would not be imposed on eligible educational institutions with
respect to Forms 1098-T required to be filed and furnished to individuals for
the 2016 calendar year if the institution reports the aggregate amount billed
for qualified tuition and related expenses on Form 1098-T instead of the
aggregate amount of payments received.
And now the bulk of 2017 Form 1098-Ts will
also be totally worthless -
difficulty. Representatives of eligible educational institutions have informed
IRS that, despite diligent efforts, the changes to accounting systems,
software, and business practices that eligible educational institutions must
make to implement this law change cannot be accomplished in time to apply these
changes for calendar year 2017.”
Hopefully more than the usual handful of 2016 and 2017 Form 1098-Ts will actually provide useful information - but there is no incentive to make this happen.
Bad move by the IRS.
They want tax pros to become Social Workers
and do their work for them, and at the same time make it more difficult for us to
do our work.They have added multiple
hours to the preparation of returns for lower-income clients who can least
afford the appropriate additional fees we should be charging for this extra
tax preparation community needs a unified lobbying voice in Washington!